(Gatineau) The Competition Bureau says Bunge’s $8.2 billion acquisition of Viterra would “likely” reduce competition in Canada’s agricultural markets.
In a report released Tuesday and addressed to the Minister of Transport, Pablo Rodriguez, the office says the agreement is likely to harm competition in the markets for the purchase of grain in Western Canada as well as for the sale of oil canola in Eastern Canada.
The report also states that Bunge could influence the behavior of G3 Global Holdings, a major competitor of Viterra. Bunge is a minority shareholder in G3 which operates grain elevators in many of the same regions as Viterra.
“The proposed transaction would likely result in significant anti-competitive effects on agricultural markets in Canada and a significant loss of rivalry between Bunge and Viterra in a number of markets,” the Competition Bureau said.
US-based Bunge announced a deal last year to buy Viterra for US$8.2 billion in cash and stock.
Both companies said in a press release that the concerns expressed were unwarranted and that they look forward to working with Transport Canada and the Competition Bureau to provide further information on these concerns.
They also expressed satisfaction with the progress of the regulatory process and are convinced that the transaction will bring considerable benefits to Canada.
Transport Canada has until June 2 to complete a public interest assessment and submit it to the minister.
The final decision on the proposed transaction will be made by the federal cabinet, based on the advice of the minister.
Bunge is the world’s largest oilseed processing company, operating 300 facilities in more than 40 countries and employing approximately 23,000 people.
Viterra, owned by Swiss commodities giant Glencore, as well as the Canada Pension Plan Investment Board and British Columbia Investment Management Corporation, operates in 37 countries and has more than 16,000 employees.
Viterra, formerly the iconic Saskatchewan Wheat Pool, is a grain handling company with more than 80 facilities across the country.
The merger is part of an ongoing wave of consolidation in the agricultural sector in recent years. Notable mergers include German company Bayer’s 2018 deal to acquire Monsanto, worth US$66 billion, as well as the 2018 merger between Agrium and Saskatchewan’s PotashCorp, which created Nutrien, the largest potash producer in the world.